Abraham Yousef · September 2024
Tepid Consumer Weighs on Department Stores
Consumers are spending less on discretionary items, leading retailers to offer promotions to drive engagement and sales during the upcoming holiday season. US department stores are seeing a decline in usage and engagement per Sensor Tower data, while Chinese e-tailers, which experienced tremendous growth in 2023, are facing challenges in attracting and retaining customers.
Key Takeaways:
Across the US department store advertising cohort, Facebook was the channel of choice, accounting for nearly 50% and 47% of YTD FY 2024 and FY 2023 spend
Of the cohort, the biggest spenders were Shein and Temu, at 35% and 41% of total spend in YTD FY2024, respectively, significantly outpacing Macy’s and Kohl’s at 8% and 7%, respectively
As Temu and Shein cycle their outsized download and MAU growth from FY 2023, the cohort as a whole is now facing falling engagement levels, with both time spent and average session count declining 3% and 5% YoY, respectively, in QTD FY 3Q24
Temu will likely continue to struggle to drive engagement, as its ability to retain users is also significantly weaker than its marketplace peer group, but in line with department stores. On average, department stores retained users in QTD FY 3Q24 was only 66% compared to 81% for mass/marketplaces
In FY 2023, Macy’s Media’ Network reported revenue rose 44% from 2021, but accounted for less than 1% of Macy’s total revenue
Per ST’s proprietary retail media data, in CY 2Q24, the network's total impressions rose 22% YoY, driven by 130% and 93% YoY growth in Instagram and desktop video impressions, respectively
For more information, request the full report from reports@sensortower.com.
